Part 1 of a 3-part series
Environmental, social and governance (ESG) is transitioning into a mainstream investing strategy. Covid-19 has strengthened the case for ESG with sustainability-themed funds outperforming peers in the market. As ESG becomes an imperative, new investment approaches and operational processes are emerging.
More ESG funds are being launched across Asia to meet growing investor demand. At the same time, there is increased scrutiny of how asset managers are integrating ESG criteria into their investment portfolios as investors look beyond cursory asset allocation and negative screening strategies. Data is an ongoing issue, which is further complicated by the lack of data standards. Measuring the impact of each ESG component is a challenge, particularly when it comes to non-financial ESG issues. All this adds more strain to the already difficult process of sustainability reporting. Investors and regulators are looking into how assets are managed and if they are indeed meeting the ESG targets reflected in their reports.
Amidst these challenges, asset service providers are well positioned to support investors as they work to meet their sustainability goals. Big data and artificial intelligence could provide innovative ways to translate and make better use of ESG data. Third-party reporting could also increase transparency and boost the credibility of an ESG fund. In the post-trade space, custodians can help asset managers in terms of monitoring compliance to ESG metrics
The Asset Events+, in association with Deutsche Bank, is pleased to be hosting this exclusive webinar to discuss how asset managers and banks could work together to navigate the evolving landscape of ESG funds.